As Fuel Prices Soar, Trucking Industry Seeks Alternatives With Natural Gas

Via Forbes

by Eric Tech, president of the Navistar Engine Group 

This week, as the trucking industry converges onLouisville for the Mid-America Trucking Show, attendees are arriving with a collective pit in their stomachs as they watch the price of oil continue to escalate—up 41% since October alone.

Trucking is the backbone of our economy, moving 70 percent of the goods delivered in America. Yet it’s a business whose viability is largely driven by the price of oil—which these days consists mostly of foreign oil.

America’s 3.5 million truck drivers feel real anxiety as they chase the American dream, only to see international tensions drive up the price of diesel fuel at the pump. And as their costs are passed along through increases in the cost of goods, all of us pay the price—as does the entire American economy.

To break the seemingly endless cycle of dependence on foreign oil, America’s truckers need alternatives. And a promising one is offered by natural gas.

Consider the facts. Natural gas today is nearly $1.50 less than diesel fuel for a price-per-gallon equivalent. And right now, America is sitting on an abundant domestic supply of natural gas—one that’s estimated will last for one hundred years or more.

Among alternative fuels that could power our nation’s trucks, natural gas is the clear leader. The challenge to using it has been twofold: 1) Making natural gas-powered vehicles more affordable, and 2) Building the infrastructure that enables our abundant supply of natural gas to reach the trucker.

While government leaders continue debating the right way to address these challenges, Navistar believes business also needs to apply its ingenuity to take advantage of this very real opportunity.

That is exactly why we’re collaborating with CleanEnergy and Chesapeake Energy now to make natural gas more widely available to America’s truckers.

Under the partnership, truckers will be able to purchase vehicles through lease arrangements that keep their monthly outlay the same as for diesel vehicles. Meanwhile, they will have access to natural gas at a network of refueling stations around the country, using natural gas that’s available at a price that’s discounted from market rates.

The combined efforts of Navistar, Clean Energy and Chesapeake will also enable more rapid development of technology across the entire industry, including heavy-duty, long-haul trucks. For the first time, a natural gas producer, a fuel distributor and a truck manufacturer are collaborating to assemble all the pieces necessary to make the system work:

• Chesapeake is providing the supply through its production efforts.
• Clean Energy is providing access by building a natural gas superhighway of filling stations along the nation’s busiest highways—more than 100 in the next year alone.
• And at Navistar, we are expanding on our current offering of medium-duty natural gas commercial trucks. Within 18 months, a full range of natural gas-powered vehicles will be available across the entire range of medium- and heavy-duty trucks.

This is a monumental and important effort for many reasons.

It’s good for the American worker, with the potential of 1 million new jobs being created by the natural gas industry over the next 6-7 years, according to the Natural Gas Supply Association.

It’s good for the consumer, because as the price of shipping and distribution decreases, we believe the prices of consumer goods will also go down.

And it’s definitely good for the truckers who have been paying an ever-increasing price at the pump.

The onus is now on our partnership to deliver, and that’s what we plan to do. The market gives every indication of responding. While we expect to sell a few thousand natural gas trucks over the next 12 months, we believe the market will expand to 15,000-20,000 trucks per year in the near future. Our customers tell us that as soon as both trucks and fuel are readily available, they will gladly add natural gas-powered trucks to their fleets.

This is consistent with President Obama’s ongoing effort to get America behind the alternative fuels cause. Now it’s up to us – and our industry – to deliver.

I’m confident we can make it happen. And I suspect my friends attending the Mid-America Trucking Show wholeheartedly agree. We need to move America toward an energy future defined by self-reliance rather than dangerous dependence.

Eric Tech is President of Navistar’s Engine Group. Lisle, Illinois-based Navistar is one of the world’s largest truck and engine manufacturers.